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UPDATE 1-Union group opposes aid for Principal Financial
February 24, 2009 / 9:53 PM / 9 years ago

UPDATE 1-Union group opposes aid for Principal Financial

(Recasts with company statement saying it has not taken a position on Employee Free Choice Act and other comments)

NEW YORK, Feb 24 (Reuters) - Principal Financial Group Inc (PFG.N) should be denied U.S. government funds because of its lobbying activity, a union coalition said on Tuesday.

Change to Win, an alliance of seven unions representing sixmillion workers, singled out Principal Financial in a letter to U.S. Treasury Secretary Timothy Geithner that raised concerns about lobbying by financial companies getting federal funds.

The union group said Principal Financial’s lobbying efforts run counter to the interests of taxpayers, citing what it described as lobbying efforts against the Employee Free Choice Act, a measure that would make forming unions easier.

“Unless and until Treasury can assure hardworking taxpayers that our money is not being used against us, firms like Principal that engage in extensive, gratuitous lobbying are undeserving of TARP assistance,” the coalition’s chair, Anna Burger, wrote in the letter.

In response, Principal Financial issued a statement saying it “has not taken a position on the Employee Free Choice Act, nor do we plan to take such a position.”

The company said it is focused “on core issues in the best interests of clients, both business and union organizations, as well as individuals covered by our plans” and has been “a frequent advocate on issues of critical importance to unions and the financial services industry, such as civil rights and pension plan funding.”

The government’s $700 billion Troubled Asset Relief Program (TARP) was launched last year in an effort to stabilize the banking system.

Principal Financial, a provider of retirement products, life and health insurance, said in November it had applied to borrow up to $2 billion through a federal lending program that is part of the financial industry bailout.

Burger said in her letter that despite new restrictions to restrict contact between lobbyists and Treasury officials in connection with applications for and distribution of bailout funds, “these rules do not address the larger problem that firms receiving significant TARP assistance continue to lobby against the interests of hardworking taxpayers.” (Reporting by Martha Graybow; editing by Jeffrey Benkoe and Tim Dobbyn)

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